Colleges, universities seek GST exemption for outsourced services

CHENNAI: In the wake of the introduction of the goods and services tax, several higher educational institutions in the state are seeking tax exemption on certain educational services, particularly those which are outsourced.

Until 2013-14, educational institutions were exempted from service tax and when the tax was introduced, auxiliary services were exempted. These included transportation of students, faculty and staff, catering, including mid-day meals scheme, security and services relating to admission or conduct of examination among others. Institutions in the state are now urging for the exemption to continue under the new GST regime.

The

Vellore Institute of Technology

is the latest institute to send a representation to the central government in this regard. The memorandum sent this week states that several construction activities as well as catering services for students and staff are outsourced by institutions. “With GST now chargeable at 18%, it puts enormous strain for us, as we cannot take input credit due to lack of taxable output service. This will enhance financial burden for students and parents,“ it said. Earlier,

Sastra University

, Thanjavur, sent a similar representation to the Centre.

S

Vaidhyasubramaniam

, dean, planning and development, Sastra University , said GST on auxiliary educational services would either dilute the focus of institutions from their core academic activities, or increase the unit cost of education and affect the gross enrollment ratio, adding that this was not in sync with the national policy on higher education. Prof

Ganesh Subramaniam

of SRM University said some universities may be able to handle the cost increase but it would eventually impact students as varsities may make up for the cost expenditure by hiking fee structures. However, Kala Vijayakumar of

SSN College for Engineering

said, “With the fee committee having fixed a ceiling on the academic fee, many colleges may not have the freedom to hike it.This will mean incurring higher costs for administrations.“


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